Workers Confident But Unprepared for
Retirement

February 27, 2002 (PLANSPONSOR.com) - Confidence
among workers that they will have enough to pay their
post-retirement bills may have rebounded this year, but the
workers aren't doing a better job with their financial
planning.

That was the key conclusion of the latest yearly survey
gauging how well Americans think they’ll do after they stop
working – the 2002 Retirement Confidence Survey.

Seven out of 10 respondents said in the current survey
are confident they’ll have enough to live on in retirement
– up from 63% in the 2001 survey. That comes as the number
of Americans who have actually calculated their retirement
needs fell from 39% in 2001 to 32% in the current
study.

Researchers said the 2002 results continue a trend first
spotted in the 2001 study – where savings confidence
outstrips financial planning activities.

Miscalculating Retirement Needs

Part of the problem with workers’ retirement savings
confidence levels, according to the latest results, is that
few appear to have a realistic idea of how much they’ll
need to live from their retirement to their death. Most
financial planners say 70% of pre-retirement income should
be sufficient to keep the same lifestyle.

Judging their income stream:

17% of respondents say they’ll require less than half
their worklife income,

25% of respondents put the income figure between 50%
and 59%, and

14% of workers said they’d require 60% to 69%

Predicting the correct figure of at least 70% of
pre-retirement income were 44% of those surveyed.

About 13% of all workers expect Social Security to
represent their largest source of income in retirement.
About 16% of older workers, age 40 to 59, said they expect
to rely on Social Security compared with 7% of younger
workers, aged between 20 and 39.

The findings were part of an annual survey released by
the Employee Benefits Research Institute, a trade group in
Washington, in conjunction with the American Savings
Education Council and Matthew Greenwald and Associates. The
group interviewed 1,000 people, including 771 workers and
229 retirees.